Bio & Medicine

Samsung BioLogics won't go down without a fight: V.P.

PUBLISHED :May 02, 2018 - 18:39

UPDATED :May 03, 2018 - 10:35

[THE INVESTOR] Samsung BioLogics said on May 2 that it would consider filing an administrative lawsuit against the country’s financial authorities if they conclude that it intentionally manipulated financial statements before its listing.

“We are willing to take the matter to court if the final decision is that we engaged in fraudulent accounting practices,” said Yoon Ho-yeol, vice president of Samsung BioLogics’ corporate business operations at a press conference.

The firm’s CFO Kim Dong-joong claimed that it did not commit fraud because it was only a matter of adopting and recognizing accounting standards. He stressed that the company had not taken unreasonable gains.

The remarks from Samsung BioLogics executives came a day after the Financial Supervisory Service issued a preliminary notice to the company and its auditors of measures the authorities could take concerning the alleged breach.

The final decision will be made after the firm defends itself to the Financial Services Commission and other related bureaus.

The accounting issue dates back to 2015 when Samsung BioLogics posted a surprising turnaround in its earnings. Some civic group suspected that the company intentionally inflated its profits ahead of its November 2016 stock market listing.

Samsung BioLogics, however, argued that it abided by accounting rules, and that the 2015 gains were the result of adhering to IFRS accounting standards. Samsung BioLogics had at the time changed the status of its biosimilar-making unit Samsung Bioepis into an affiliate, citing the possibility of minority shareholder Biogen exercising its call option to increase its stake to 50 percent minus one share as Bioepis’ perceived value rose after receiving approval for its new biosimilar in Europe.

Through this process, the value of Samsung BioLogics’ stake holding in the affiliate surged to 4.8 trillion won from 300 billion won. “Biogen sent us a letter showing its willingness to exercise the option in the fourth quarter of 2015 when Samsung Bioepis was considering NASDAQ listing,” said Yoon.